Despite the recent increase in online shopping, it appears that the logistics of it all are still something of a mess. A study of 3,000 retailers, commissioned by ecommerce delivery company MetaPack, found that two-thirds of shoppers would choose to buy from one online retailer over another because the delivery options were better. More than half had simply abandoned a shopping session when they realised they could not get things delivered when they wanted and 76 per cent of shoppers will check an online retailer’s returns policy before ordering.
As Kate Smaje, retail analyst McKinsey’s, a consultancy, puts it: “Consumers are not concerned about the shiny gimmicks, they want retailers to get the back-end logistics right.”
Returns and deliveries represent a huge cost for retailers. Fulfilling “omnichannel” orders — ones that can be placed and picked up in a number of ways, in store and at home — is unprofitable for about 84 per cent of retailers, research by professional services firm PwC found earlier this year. John Lewis, the UK department store, recently announced that it would charge £2 for ‘click-and-collect’ orders of under £30, another indicator that free collection services are becoming unsustainable.
Yet when retailers invest in technology they are focused mainly on the whizzy front-end tools. Peter Buckley, head of account management at Taggstar, which provides data for retailers, says he regularly asks clients if they would like help in optimising inventory and logistics, but they always prefer to focus on increasing sales.
“It is all about growing the top line. Retailers say that delivery is a known problem but too difficult to solve,” Mr Buckley says.
